@properties | Christie’s International Real Estate—the largest residential real estate brokerage firm in Illinois and the eighth largest in the U.S.—is the latest in real estate to face a class action lawsuit involving commissions in the wake of Burnett vs. NAR.
The company is named in a complaint filed by plaintiff and homebuyer James Tuccori late last year, who alleges that they engaged in price fixing commissions, and that these high commissions are harming homebuyers by driving up home prices and limiting competition.
“(@properties is) engaging in a conspiracy that perpetuates anti-competitive measures in the real estate broker market that harm homebuyers by, among other things, inflating and concealing commissions paid to real estate brokers. Defendant’s anti-competitive practices burden homebuyers nationwide with increased home prices and unnecessarily high costs,” states the filing.
A statement from @properties says that this filing is “one of many ‘copycat’ lawsuits filed in the wake of the recent jury verdict in Kansas City against NAR and the nation’s largest brokerages.”
“The Kansas City case was premised on those other brokerages controlling NAR by having their executives serve on its board of directors and executive committee, which allegedly created, implemented, and enforced the NAR rules at issue. The Chicago complaint makes no specific allegation that @properties was or is involved in any such activities,” the statement continues. “In fact, while we are members of NAR, no @properties manager or executive has ever served in any role at NAR with any rule-making authority. This applies to the former @properties agent who is mentioned in the complaint, but who was never an employee or manager with @properites and was never directed by @properties’ management in her volunteer role with NAR.”
@properties expressed that they “will move to vigorously defend against this complaint and believe that it will be resolved in our favor.”
James Tuccori and his lawyers had not responded to requests for comment at press time.
The complaint names only @properties as a defendant, but does mention NAR in detail. With Burnett vs. NAR having found the organization guilty of price fixing commissions, this suit alleges that NAR is a co-conspirator since @properties is both a member and “heavily intertwined” with the organization, and thereby has benefited from its rules and policies.
Specifically, the filing states both are based in Chicago, and brokerages need to be a part of NAR to access Midwest Real Estate Data MLS—of which @properties is listed as one of their “preferred unit owners.”
The complaint homes in specifically on NAR’s rule that requires listing brokers to offer compensation to a buyer broker, and the rule of preventing buyer agents from making offers contingent on a reduction of the buyer-agent commission—both rules that were central to Burnett, and have been the focus of other cases.
“The result is that the amounts of buyer-agents’ commissions are inflated, and this fact is opaque and ill-understood by the homebuyers whose home prices fund those commissions,” states the filing. “These anti-competitive rules permit Defendant and other NAR members to sustain buyer-agent fees at artificially high levels which would not exist in a competitive marketplace.”
Tuccori filed the suit on his behalf and on “behalf of similarly situated individuals,” which includes anyone who bought a home in the U.S. that was listed on a MLS using an @properties agent between March 17, 2000 (when the company was founded) and today.
What led Tuccori to file was his own use of an @properties agent to buy a home in Chicago’s West Town neighborhood for $785,000 in 2018, as reported by Crain’s Chicago Business.
The filing specifies that “In 2018, Plaintiff purchased a home in Chicago using a buyer-agent affiliated with At World Properties, LLC (@properties). The home Plaintiff purchased was listed on a local MLS service that, on information and belief, was run by associations with boards of directors comprised entirely of NAR members who must adhere to NAR’s guidelines and policies.”
Originally filed in Cook County Circuit Court on Dec. 8, the complaint was shifted to the U.S. District Court in Northern Illinois on Jan. 5., joining the cases of Moehrl and Batton.
A status hearing in the case is scheduled for March 19.
